Sugar Wages

Oct 29, 2009 Editorial

GAWU, the largest union in the sugar industry, and GuySuCo, are locked in negotiations over wage increases for workers in 2009. After a countrywide strike that may or may not have had anything to do with the impasse (depending on whether one asks the union – “no” – or the management – “yes”) the matter has reached the conciliation stage under the aegis of the Chief Labour Officer (CLO).
GAWU had made an initial demand for a 15 per cent increase, citing the inflation rate over the last few years and the anticipation of a continuation of that trend. GuySuCo had countered with a flat offer of three per cent pointing to the dire straits of the industry.
On Tuesday, GAWU lowered its demand to 10 per cent, but this was promptly rejected by the corporation, which delivered financial documentation to the CLO to buttress claims of its financial limitations that precluded a higher wage increase.
This paper has consistently taken a pro-worker position in the travails of the sugar industry that began over a decade ago not only in Guyana, but in the entire ACP, as Europe moved unilaterally to strengthen its hand in WTO trade negotiations.
Our Government’s retention of ownership of GuySuCo could only be justified from this perspective, in addition to the foreign currency earnings of the corporation.
However, a pro-worker position does not mean one that acts to the detriment of the industry as a whole. This rationale, as a matter of fact, was offered by the President of GAWU when he lowered his wage demand from 15 per cent to 10 per cent. Short term gains in wages will become very bitter over the longer term if the industry is pushed into insolvency.
This latter scenario is a real possibility from the numbers being thrown out.
In the last two years, sugar production has averaged a paltry 226,000 tonnes – far below the 350,000 tonnes it had achieved in colonial times. This year, the first crop fell short of its target by 6000 tonnes and the initial overall target of 290,000 tonnes was downgraded to 242,000 tonnes, that now appears problematical even with the new Skeldon Factory coming on stream.
The recent sugar strike, inhibiting land rehabilitation and harvesting, certainly did not help matters. Last year, the corporation suffered a loss of $4 billion and owed its bankers $3 billion: this year, as of September 30, the loss is projected at $2.5 billion with loans from the Banks at over $5 billion.
With each percentage rise in wages calculated to add $150 million, the seven per cent gap between the GAWU and the GuySuCo positions demand an additional $1.05 billion – which the latter corporation just does not have.
The union’s argument for a 10 per cent raise as necessary to match inflation has also been undercut by the recent IMF Regional Economic Outlook: Western Hemisphere (REO) report that Guyana is expected to end this year with an inflation rate of 3.3 per cent – a reduction from the 6.4 per cent of last year and less than the four per cent projected for next year.
Wage increases are also justified by increased worker productivity – but this has not been achieved in our sugar industry of recent, regardless of who is at fault. The Board’s plans for industry-wide increased mechanisation, $45 billion investment in expansion of production (Blairmont) and Skeldon and packaging of value-added Demerara Gold (Enmore), constructing an ethanol plant and refinery etc., will eventually lead to higher productivity and higher wages for better skilled workers.
Workers and management will have to take a page from the autoworkers of the US and work together for the survival of the industry.
On top of the present strong markets for sugar, the prospects for our Demerara Gold Brand look very healthy, in a world that is increasingly sceptical of the more highly processed versions.
For the greater good, in more ways than one, we are proposing that GAWU reduce its wage demands to four per cent and that management commit to a voluntary wage freeze for this year in a gesture of solidarity.
Do not kill the goose that lays the golden (sugar) egg.

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